-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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MIC-Info: RSA-MD5,RSA,
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<SEC-DOCUMENT>0001181431-07-066673.txt : 20071106
<SEC-HEADER>0001181431-07-066673.hdr.sgml : 20071106
<ACCEPTANCE-DATETIME>20071106130003
ACCESSION NUMBER:		0001181431-07-066673
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20071102
FILED AS OF DATE:		20071106
DATE AS OF CHANGE:		20071106

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PEGASYSTEMS INC
		CENTRAL INDEX KEY:			0001013857
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374]
		IRS NUMBER:				042787865
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		101 MAIN ST
		CITY:			CAMBRIDGE
		STATE:			MA
		ZIP:			02142-1590
		BUSINESS PHONE:		6173749600

	MAIL ADDRESS:	
		STREET 1:		101 MAIN ST
		CITY:			CAMBRIDGE
		STATE:			MA
		ZIP:			02142-1590

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			Reilly James T
		CENTRAL INDEX KEY:			0001362247

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-11859
		FILM NUMBER:		071216862

	BUSINESS ADDRESS:	
		BUSINESS PHONE:		617-374-9600

	MAIL ADDRESS:	
		STREET 1:		PEGASYSTEMS INC.
		STREET 2:		101 MAIN STREET
		CITY:			CAMBRIDGE
		STATE:			MA
		ZIP:			02142
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>rrd177213.xml
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2007-11-02</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0001013857</issuerCik>
        <issuerName>PEGASYSTEMS INC</issuerName>
        <issuerTradingSymbol>PEGA</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001362247</rptOwnerCik>
            <rptOwnerName>Reilly James T</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>C/O PEGASYSTEMS INC.</rptOwnerStreet1>
            <rptOwnerStreet2>101 MAIN STREET</rptOwnerStreet2>
            <rptOwnerCity>CAMBRIDGE</rptOwnerCity>
            <rptOwnerState>MA</rptOwnerState>
            <rptOwnerZipCode>02142</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>Chief Accounting Officer</officerTitle>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
                <footnoteId id="F1"/>
            </securityTitle>
            <transactionDate>
                <value>2007-11-02</value>
            </transactionDate>
            <transactionCoding>
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                <transactionCode>M</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>2800</value>
                </transactionShares>
                <transactionPricePerShare>
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                <transactionAcquiredDisposedCode>
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                </transactionAcquiredDisposedCode>
            </transactionAmounts>
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                <transactionPricePerShare>
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                <sharesOwnedFollowingTransaction>
                    <value>71098</value>
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        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
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            <transactionDate>
                <value>2007-11-02</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>M</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
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            <transactionAmounts>
                <transactionShares>
                    <value>12000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>8.67</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
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            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>83098</value>
                </sharesOwnedFollowingTransaction>
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            <ownershipNature>
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        </nonDerivativeTransaction>
    </nonDerivativeTable>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Stock Option - Right to Acquire</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>4.38</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2007-11-02</value>
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            <transactionCoding>
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            <transactionAmounts>
                <transactionShares>
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                </transactionShares>
                <transactionPricePerShare>
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                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
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            <exerciseDate>
                <footnoteId id="F2"/>
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            <expirationDate>
                <value>2011-03-08</value>
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            <underlyingSecurity>
                <underlyingSecurityTitle>
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                <underlyingSecurityShares>
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                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
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                </sharesOwnedFollowingTransaction>
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            <ownershipNature>
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        </derivativeTransaction>
        <derivativeTransaction>
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                <value>Stock Option - Right to Acquire</value>
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            <conversionOrExercisePrice>
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            <transactionDate>
                <value>2007-11-02</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>M</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
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            <transactionAmounts>
                <transactionShares>
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                <transactionPricePerShare>
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                <transactionAcquiredDisposedCode>
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            <expirationDate>
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                <underlyingSecurityTitle>
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                <value>Stock Option - Right to Acquire</value>
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            <expirationDate>
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            <underlyingSecurity>
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                    <value>D</value>
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                <value>2014-11-11</value>
            </expirationDate>
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                    <value>12000</value>
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                    <value>0</value>
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                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
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            <exerciseDate>
                <footnoteId id="F2"/>
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            <expirationDate>
                <value>2015-12-08</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>12000</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
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                <sharesOwnedFollowingTransaction>
                    <value>0</value>
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            <ownershipNature>
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        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">Effective November 6, 2007, Mr. Reilly will no longer be a Section 16 Officer.</footnote>
        <footnote id="F2">All options are exercisable.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>/s/ Shawn Hoyt, Esq., as Attorney-in-Fact for James T. Reilly</signatureName>
        <signatureDate>2007-11-06</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----